Global Food Inflation Hitting The Poor Countries First, But Not Last

[Kathianne]

http://www.cnbc.com/id/40855496


Egypt Woes Bring Global Food Inflation Fears to Fore
Published: Sunday, 30 Jan 2011 | 9:37 PM ET

By: Bob Pisani
CNBC Reporter


...3) It is food inflation that is ultimately breaking the the back of the Mubarak regime. Traders on Friday noted that Fitch, in downgrading Egypt's outlook to negative, specifically cited the high food inflation, which is running at about 17 percent a year. Staples like meat, sugar and vegetables have been climbing out of the reach of the ordinary Egyptian for a year.

Bottom line: we are watching a major economic story — global food inflation — play out now as a major geopolitical event.

[Kathianne]

And on a related note, one that is being touted as 'good news' for Obama, not so sure they are getting this right. People are using their savings and minimal pay increases just to buy what they've bought since cutting way back during recession. Inflation is hitting hard. In other words, it's getting worse:

http://www.cnbc.com/id/41349851


Consumer Spending Rises More Than Expected
Published: Monday, 31 Jan 2011 | 8:47 AM ET

By: Reuters

U.S. consumer spending rose more than expected in December to post the sixth straight month of gains as households drew down on their savings to fund purchases, government data showed on Monday.

Spending in December came as incomes increased 0.4 percent and savings dropped to their lowest level since March.

The Commerce Department said spending increased 0.7 percent after rising by 0.3 percent in November.

Economists polled by Reuters had expected spending, which accounts for about 70 percent of U.S. economic activity, to increase 0.5 percent last month...

Spending in December came as incomes increased 0.4 percent and savings dropped to their lowest level since March. Incomes grew 0.4 percent in November and the increase last month was in line with economists' expectations. Savings fell to $614.1 billion from $634.4 billion in November.

The report also showed the Federal Reserve's preferred measure of consumer inflation—the personal consumption expenditures price index, excluding food and energy—was unchanged in December after edging up 0.1 percent in November.

...